When you rent an aircraft from an FBO or some other aircraft owner, you know that as pilot-in-command you have responsibility for operating that aircraft in compliance with the FARs. But other than having to face the wrath of the FAA, what is your responsibility if something bad happens during a flight (e.g. an accident)? Ideally, you hope you have insurance to cover you. Unfortunately, when you rent an aircraft, that may not always be the case. The estate of a renter pilot found that out the hard way in a recent case.

In Knezovich v. Hallmark Insurance Co., a student pilot rented an aircraft from an FBO. While he was operating the aircraft solo, he was involved in a midair collision that took his life, as well as the life of the pilot and passenger in the other aircraft. A number of wrongful death lawsuits ensued. Additionally, the estate of the deceased student pilot sued the insurance company that insured the aircraft seeking a judgment declaring that the insurer owed the estate a duty to defend and indemnify the estate in the wrongful death lawsuits.

Ultimately, the Court determined that the insurer was not required to defend or indemnify the estate of the deceased student pilot because the policy language specifically excluded coverage for a pilot, student or otherwise, who rented an aircraft. Since the student pilot rented the aircraft for a solo flight, rather than a flight in which he received instruction from one of the FBO's flight instructors, the Court held that the insurance policy did not provide coverage.

Although this is an unfortunate situation for the deceased pilot's estate, this case serves as a reminder to anyone who rents aircraft to confirm that insurance coverage is in place that will protect you the renter. It isn't enough to simply ask the FBO or aircraft owner whether they have insurance. You need to be sure that coverage is in place to protect you, the renter. If the aircraft owner's or FBO's insurance doesn't provide coverage, you need to know that so you can understand your risk and either obtain coverage elsewhere or go without.

Does a Sheriff Department's Air Trauma Transport Qualify for Public Aircraft Status?

As you may know, aircraft owned and operated by a state government entity may be considered "public aircraft" under 49 USC §40102(a)41. To be considered a public aircraft, 49 USC §40125(a) and (b) require that the governmental entity's operation of the aircraft be in furtherance of a "governmental function" such as national defense, intelligence missions, firefighting, search and rescue, law enforcement etc. and the aircraft may not used for commercial purposes or to carry an individual other than a crewmember or a qualified non-crewmember.

Why might that be important? Well, one of the primary reasons is public aircraft are not required to comply with the FARs. Thus, public aircraft operations are not required to comply with the operational limitations or maintenance requirements of the FARs nor are they subject to FAA enforcement for failure to comply with these FARs during public aircraft operations.

The FAA Office of the Chief Counsel recently issued a Legal Interpretation responding to an inquiry regarding whether a county sheriff department's performance of an air trauma transport of a civilian victim from either a trauma scene (e.g. a motor vehicle crash) or an inter-hospital air trauma transport would fall within the operating scope of a public aircraft. The Interpretation initially observed that the issue was whether the trauma victim being transported is viewed as someone other than a qualified non-crewmember that would cause the flight to lose its public aircraft status.

The Interpretation stated that helicopter search and rescue is considered a governmental function that qualifies for public aircraft status. Since the trauma victim being transported is the reason for the operation, the patient being transported becomes a qualified non-crewmember under 49 USC §40125(a)(3)(B). Of course, this presumes that the sheriff's department does not collect any sort of fee, which would be considered compensation and would give the flight a commercial, rather than a public aircraft, status.

With respect to transportation of a trauma victim between hospitals, the Interpretation cautioned that "inter-hospital air trauma transport, does not appear to be a category of search and rescue operation and thus would not qualify as a public aircraft operation under the statute." Although it might be possible that such an operation could be conducted as a governmental function given the proper circumstances, without an explanation of those circumstances the Interpretation was unwilling to say that such operations would qualify as a governmental function.

As a result, since the status of public aircraft operations are determined on a "flight by flight" basis, in order to ensure that the FAA will recognize their public aircraft status, public aircraft operators will need to ensure that they comply with the applicable statutory requirements and with the FAA's policy on public aircraft operations.

Posted by Greg

October 15, 2012

EAJA Attorney Fee Awards are Hard to Get, Even When the FAA Can't Get It's Story Straight

A recent NTSB decision illustrates, once again, how difficult it can be for an airman who successfully defends against the FAA to obtain an award of attorney fees under the Equal Access to Justice Act ("EAJA"). In Administrator v. Kamm the FAA alleged the airman violated FARs 91.155(a) and 91.13(a) when he allegedly operated a passenger-carrying flight under visual flight rules ("VFR") through clouds in Alaska. After a hearing, the administrative law judge ("ALJ") concluded that video and photographic evidence, as well as the testimony presented by the FAA, failed to prove it's case because none of the evidence showed the aircraft flying through clouds. Not only did all four of the tourist passengers testify that the aircraft did not fly through clouds, the ALJ also found the testimony of two FAA inspectors who were passengers on the flight to be unreliable.

The ALJ noted inconsistencies between the inspectors’ written statements, drafted approximately two weeks following the flight at issue,
and their testimony at the hearing. He also found that the inspectors' stories were not corroborative because one inspector stated the aircraft's left
wing disappeared into clouds for a matter of moments on two specific instances but the other inspector stated that the aircraft flew through small clouds
approximately eight times during the flight.

As a successful party, the airman then applied for an award of attorney fees under EAJA. However, the ALJ denied the fee request finding the FAA was substantially justified in pursuing the case. The ALJ rejected the airman’s argument that based upon the evidence and testimony, a fee award was appropriate because the FAA shouldn't have pursued the case at all. The ALJ stated that a hearing was necessary to assess the reliability and credibility of the inspectors’ and other witnesses' testimony. The airman then appealed the denial to the NTSB.

On appeal, the airman argued the ALJ erred in finding the FAA’s pursuit of the underlying case was reasonable and that the FAA should have known the
inspectors’ recollections of the flight were inconsistent and, as a result, it should have abandoned the case before the hearing. With respect to the first argument, the Board observed that the FAA is substantially justified in pursuing a complaint if key factual issues hinge on witness credibility. Since the ALJ's decision hinged on his credibility findings at the hearing, the Board found it was reasonable for the FAA to pursue the case against airman.

In analyzing the airman's second argument, the Board initially observed that the FAA will be liable for an award of attorney fees under EAJA if the FAA does not abandon the investigation of a case when it knows or should know the case is neither reasonable in fact nor law. Next, the Board noted the FAA's investigation of the case included reviewing the physical evidence and interviewing the witnesses, including the four tourist passengers and only then did it decide to pursue the case against the airman. As a result, the Board found the FAA did not disregard or fail to give meaningful consideration to the airman’s defense. It then concluded by stating "[g]iven the evidence before the Administrator, consisting of photographs and the first-hand observations of experienced FAA inspectors, we find the Administrator’s pursuit of the case was reasonable."

This case highlights the high hurdle applicant's must vault in order to show that the FAA was not substantially justified in pursuing it's case. But if the FAA's own witnesses can't get their stories straight, I'm not sure how it can be justified in pursuing your case. Unfortunately, when the ALJ couches his decision in terms of credibility, as is the case more and more often, it can be very difficult to win an EAJA attorney fee award.

Posted by Greg

October 05, 2012

The Stale Complaint Defense: Getting the FAA's Case Dismissed When It Takes Too Long

As a government agency, the FAA is a bureaucracy at its best, or worst, depending upon your perspective. Sometimes that bureaucracy results in the FAA taking a long time to investigate or initiate an enforcement case. If that happens and the FAA pursues an enforcement action against a certificate holder more than six months after occurrence of the offense the FAA alleges violates the FARs, the certificate holder may be able to assert a "stale complaint" affirmative defense based upon the FAA's delay. For more information on the stale complaint defense and how it works, please read my latest article: Analyzing a Stale Complaint Affirmative Defense in the Face of an Allegation of Lack of Qualification.

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